ABSTRACT
The Political History After the 1914 amalgamation, which in law defined Nigeria as one united country, the British colonial government continued to rule the Northern and Southern Protectorates as two distinct entities with very minimal attempts at administrative, institutional and social coordination. ‘At the time the British proclaimed a Protectorate over Northern Nigeria,’ for instance, ‘the traditional rulers in the area, the Emirs, were promised that there would be no interference in matters of religion. Missionary activities were therefore disallowed. As a consequence, the Northern region was in the main excluded from European education, largely provided by the missionaries in Southern Nigeria’ (HRW, 1999:40). Similarly, in the Northern Protectorate the colonial authorities governed mostly through a system of ‘indirect rule’ in which they allowed the powerful Muslim Emirs to conduct local administration and governance through existing centralized political structures as in the pre-colonial time. In the Southern Protectorate where the anti-colonial struggle for independence was stronger and where traditional political systems were comparatively more diffused than centralized, the colonial authorities applied more direct and authoritarian methods of administration that further weakened and, in some cases, obliterated a number of traditional institutions (Okoli, 1980). The colonial government divided the Southern Protectorate into the Western and Eastern regions in 1939, creating a geo-demographic imbalance that left the Northern region far larger than the Western and Eastern regions together. Each region comprised one dominant ethnic group and a mosaic of ethnic minorities that lived under the perpetual fear and threats of domination by the majority groups. The three regions were still governed and operated separately until 1954 when a central government with a parliament was established, thus in legal terms or in theory making Nigeria a federation. Nigeria obtained independence on 1 October 1960, barely six years after it became a ‘federation’. With very little effort at political, administrative, social, economic and cultural integration during colonial history, primordial ethnic structures and cleavages have largely been the basis of national politics before and after independence. Since independence, in particular, Nigeria’s political history has been characterized by inter-ethnic suspicion and rivalry, further culminating in a cycle of instability. The first post-independence political dispensation (also known as the First Republic) was based on a Westminster model of parliamentary democracy and this was violently overthrown in January 1966 in an abortive coup executed mainly by young Ibo officers. Several civilian politicians, including the Prime Minister, Tafawa Balewa, and the Premier of Northern region, Ahmadu Bello, were killed in the coup. The young coup makers led by Major Chukwuma Nzogwu were prevented from usurping political power by the counter-intervention of General Aguyi Ironsi, the highest officer in the Nigerian army, who subsequently became Head of State. A second military coup occurred six months later in July 1966 in which General Aguyi Ironsi, the military Head of State who was of Ibo ethnic origin, was assassinated by a team of young commandos from the Northern region. The coup was followed by an ethnic massacre of defenceless
Ibo civilians in regions other than their own, especially in the Northern region. This event resulted in a 30-month civil war in which the Ibo-dominated Eastern region attempted to secede from the federation. The war ended in January 1970 in favour of the federal military government led by General Yakubu Gowon. General Murtala Mohammed overthrew Gowon in July 1975 in a palace coup that could be likened to an expedition of the ‘militariat’ on account of the regime’s ‘populist and transformatory rhetoric,’ not matched by ‘creation of new participatory institutions’ (see Kandeh, 2004). Murtala was assassinated in an abortive coup six months later. It was the assassination of General Murtala that brought General Obasanjo, Nigeria’s current President who was then Murtala’s second in command, to power in February 1976. General Obasanjo voluntarily transferred power to a popularly elected civilian President, Alhaji Shehu Shagari, in October 1979. A military junta overthrew the civilian regime, also known as the Second Republic and based on the US model of presidential democracy in December 1983. Between 31 December 1983 and 29 May 1999 when a new civilian government was inaugurated, four successive military dictators – Buhari, Babangida, Abacha, and Abdusallami Abubakar – ruled Nigeria. Babangida’s regime was remarkable for executing an abortive transition to civilian rule in which the dictator annulled a popular presidential election supposedly won by Moshood Abiola, a Yoruba business tycoon from the Southwest, in June 1993. The election was apparently annulled because the supposed winner was not acceptable to the Northern-dominated military establishment (Onwuejogwu, 2000). The episode sparked off major ethnic and pro-democracy protests in Nigeria. To placate the highly restive ethnic Yoruba and pro-democracy groups, General Babangida resigned as President and instituted an interim national government (ING) headed by a protégé civilian and Yoruba businessman, Ernest Shonekan. The ING was most unacceptable to a wide majority of Nigerians and was supplanted in a palace coup six months after by its Defence Chief, General Sanni Abacha whose regime later become a notorious dictatorship. Nigeria has spent a longer part of its post-independence history under military dictatorship as opposed to civilian democracy. The consequences of frequent military intervention in Nigerian politics have been devastating – human rights repression, militarization of society and the political landscape, abuse of the rule of law, gross indiscipline, arbitrary proliferation of subnational States and local government areas, aggravation of ethnic politics, destruction of the productive sectors of the economy and monumental corruption (cf. Ukwu, 2000; Omeje, 2000). The Economic Structure Nigeria is an oil-rich country and for over the past 30 years the country’s economy has hinged on the production and export of crude oil. It is largely a monocultural economy. Following the dramatic surge in oil exports since the early 1970s, oil production revenues provide about 72 per cent of budgetary revenues (Ukwu, 2000). The petroleum sector comprises more than 40 per cent of GDP, continuing
to provide more than 94 per cent of exports. One of the major consequences of the oil export boom of the early 1970s was the systematic neglect of the non-oil export sectors of the economy, in particular the agricultural sector. Agricultural production, which accounted for more than 60 per cent of the total export revenues in the colonial period through the 1960s, has suffered a dwindling fortune since the oil boom of the 1970s, accounting for less than 8 per cent of export revenues from the mid-1970s through the 1990s (Ukwu, 2000). Western multinational companies dominate the ‘upstream sector’ (i.e. exploration and production of crude oil) of the oil industry. Writing from a largely Marxist perspective, scholars like Forrest (1977), Beckman (1982), Bangura (1984), Turner & Badru (1985) and Usman (1986) have shown that there a close relationship between ‘the interests of the dominant social classes’ in Nigeria’s oil dependent political economy on the one hand, and the spate of military coups and political instability in the country, on the other hand. Political instability has affected economic performance in diverse ways. Economic policies are frequently disrupted by abrupt changes of government and corruption is rife in the public realm. For many years, Nigeria has been consistently ranked one of the most corrupt countries in the world by the Germany-based Transparency International based on its global corruption perception index (cf. Vanguard, 2003; Daily Trust, 2003). In July 2002, the US State Department issued a travel notice that blacklisted Nigeria as an unsafe place for US citizens on account of extreme violent crimes and political violence (Vanguard, 2002a). In an updated travel notice promulgated in December 2003, the State Department further warned US citizens, especially ‘those wishing to travel to Nigeria for business,’ that ‘conditions in Nigeria pose considerable risks to travellers’, stressing that, ‘violent crime committed by ordinary criminals, as well as by persons in police and military uniforms, can occur throughout the country. Kidnapping for ransom of persons associated with the petroleum sector, including US citizens, remains common in the Niger Delta area’ (This Day, 2003a). To a large extent, Nigeria is regarded in international circles as highly unfavourable for business. The adoption in June 1986 of the World Bank Structural Adjustment Programme (SAP) with its emphasis on deregulation has worsened the country’s economic situation by freezing social development expenditure and heightening inflation. Per capita GNP is about US$260 and both poverty and unemployment levels are unacceptably high. For many years, total external debt burden has stood at about US$35 billion. However, in the run up to the G-8 Gleneagles Summit of July 2005, the Paris Club of western creditor governments agreed in principle to cancel about $18 billion of Nigeria’s debt – representing 60 per cent of the country’s $30 billion debt to the Club – on the condition that Nigeria would clear the remaining balance of 40 per cent through a debt buy-back operation and by channelling some recent windfall revenues from oil to execute an exit plan endorsed by the Paris Club (Daily Champion, 2005). The debt cancellation proposal is part of the new western debt relief and economic recovery aid to heavily indebted poor countries and the highly publicized ‘Make Poverty History in Africa’ campaign. More significantly, the debt relief is an international
endorsement of President Obasanjo’s recent economic reforms in Nigeria, which many local critics have criticized as inconsequential window-dressing. The Obasanjo administration has embarked on some limited reforms aimed to improve transparency and economic performance, which include implementation of the Extractive Industries Transparency Initiative (EITI) in Nigeria, the publication of monthly oil revenue distributed to the three tiers of government, public service and financial sector reforms, especially at the federal level to mitigate corruption and inefficiency. These reforms are all part of the National Economic Empowerment Development Strategy (NEEDS), a new short-term macroeconomic restructuring and development programme for the country promulgated in late 2003. The programme is premised on the rhetoric of wealth creation, employment generation, poverty reduction and value reorientation. The economic restructuring agenda focuses mainly on strengthening and expanding the private sector, public sector reform and anti-corruption campaign. The Foreign Policy Nigeria plays a leading role in African politics, especially in the West African subregion where it is a dominant power. In recent years, Nigeria’s foreign policy has centred on promoting regional economic cooperation in Africa, building a large ECOWAS (Economic Community of West African States) common market akin to the European Union (EU) and strengthening security cooperation and multinational peacekeeping in West Africa. The Nigerian-led ECOWAS Ceasefire Monitoring Group or ECOMOG has played a leading role in resolving the recent civil conflicts in Liberia, Sierra Leone, Guinea Bissau and Cote d’Ivoire. At the same time and in spite of considerable economic decline, Nigeria’s relative military, socio-demographic and economic clout enables its leadership to play a high-profile role in the wider continental politics under the framework of the African Union (formerly known as Organization of African Unity). Beyond the African region, Nigeria’s foreign policy thrust in recent years has also featured international economic diplomacy anchored on using foreign policy as an instrument to enhance domestic economic recovery (via attraction of foreign capital investments, credit facilities, campaign for debt forgiveness) both for itself and, to a lesser extent, for the rest of the world’s poorest countries of Africa. The Present Democratic Trends Nigeria presently has an elected democratic government that was inaugurated on 29 May 1999 after a voluntary disengagement of the military from power as a result of popular local and international pressure. Since the return to democracy, Nigeria has witnessed a number of new political measures and changes aimed to remedy the damage and disastrous legacy of the military. A number of positive changes have taken place – a gradual easing of the hitherto extremely militarized political culture and relative restoration of human rights (i.e. only in relation to the past military era); financial sector, and to a lesser extent, federal public service
reforms, and an increase in subsidies on a few essential sectors, in particular, primary and post-primary education. Several problems tend to be overwhelming the new democratic dispensation. The most critical problem is probably the inability of constituted governmental authorities at all levels to curb the entrenched culture of lawlessness and political violence that have characterized much of the countries post-independence history, but which tends to have worsened since the restoration of civilian rule in 1999. The high stake use of militia violence and thuggery as acceptable instruments of politics compounds the syndrome of lawlessness. As in most previous dispensations, both the public and members of the dominant political elites still face high risk of political violence and other effects of the entrenched culture of lawlessness in society. Other notable problems since the inauguration of the fourth civilian republic include the proliferation and menace of ethnic armies and militias, the revival of Islamist fundamentalism leading to a rise in Muslim-Christian violence in the Muslim-dominated States of Northern Nigeria, natural resource conflicts and resistance of minority ethnic groups in the oil-rich Niger Delta area of the south and the enormous challenge of reforming the public service (i.e. at federal, State and local government levels) and economy to mitigate corruption, hardship and poverty. The issue of natural resource conflict and resistance of minority ethnic populations in the Niger Delta is particularly high on the political agenda and is evidently one of the strongest factors in contemporary political instability, as well as in Nigeria’s poor international image. In March 2005, President Obasanjo inaugurated the controversial National Political Reform Conference (NPRC) to map out solutions and strategies for redressing the myriad of political problems facing the country. With a lengthy list of non-debateable or ‘no-go’ areas, such as unity of Nigeria, federal character, presidentialism, fundamental objectives and directive principles of state policy, and so forth, the NPRC has been roundedly inveighed by the many sections of the Nigerian public, civil society and opposition parties as pro-establishment windowdressing. Longstanding advocates of a sovereign national conference to debate and determine Nigeria’s political future, including the famous pro-National Conference Organization (PRONACO) led by frontline statesman Anthony Enahoro and Nobel Laureate Wole Soyinka distanced themselves from the government ‘talk shop’ and pledged to organize a parallel national conference. The NPRC report was submitted to President Obasanjo in July 2005, who, in turn, forwarded the report to the National Assembly for consideration and possibly, enactment into law. Although many delegates have contested the content of the report as having been dictated by the Conference executive committee, the report nonetheless contains a range of positive recommendations on issues like protection of minority rights and the rights of women and vulnerable social groups (children, disabled, senior persons over 60 years), public health, devolution of powers in the federation, electoral reform, prison reform, fiscal accountability and transparency, police service, and traditional political institutions and cultural systems. The report is, however, silent or vague on a number of serious national issues, including possibilities of amending some existing controversial laws on ownership of land
and natural resources, revenue distribution, security sector reform, as well as the ubiquity of violent conflicts in the federation and conflict management. While Nigerians await the outcome of the NPRC report, it is indicative that both political and economic progress in the country remains perceptibly slow, and as such impropriety and corruption are still rife in public offices (Dike, 2005). More significantly, the ongoing reforms are clearly not far-reaching enough to redress key institutional constraints such as deformities in the country’s federal system, the perfusion of high stake accumulation structures, politics and culture in both the state and society, and the domination of the state by a coalition of selfserving elite forces whose material interests, character and orientation to politics and governance remain highly prebendal and anti-development. Given the unsavoury history of military intervention in Nigerian politics, the greatest challenge to democratic governance in the country is probably how to ensure political stability, prevent the military from violent overthrow of the government in future and also ensure that subsequent governments do not subvert or abrogate a few positive elements or the present reform measures. 3.3 The Niger Delta Area: Environmental and Socio-Demographic Background The Niger Delta area, famous for its enormous crude oil reserves, is a massive wetland of about 70,000 square kilometres that spreads over a number of ecological zones: sandy coastal ridge barriers, brackish or saline mangroves, freshwater (permanent and seasonal) swamp forests, and lowland rain forests (SPDC, 2002:9). More than half of the area consists of fragile mangrove and freshwater swamp forests. The Delta is a vast floodplain interspersed with a network of creeks and tributaries that drain the River Niger into the Atlantic Ocean along the Gulf of Guinea. ‘The high rainfall and river discharge during the rainy season, combined with the low, flat terrain and poorly drain soils, cause widespread flooding and erosion: over 80 per cent of the Delta is seasonally flooded’ (World Bank, 1995:vi-vii). For a greater part of the year only select elevated areas of the Niger Delta remain dry. ‘A dynamic equilibrium between flooding, erosion, and sediment deposition’, observes the World Bank (1995), ‘is the defining characteristic of the Delta ecosystem’. The Niger Delta mangroves and rain forests have enormous biodiversity significance. They hold a large number of threatened and endangered species, particularly animals like Sclater’s gucnon, iguanas and alligators (Akegwure, 1995:44; Robson, 1999). The rich biodiversity of the Niger Delta and its naturally fragile ecosystem are, however, severely threatened by the extensive crude oil production activities in the area. Nigeria’s total proven reserves of oil are estimated to be 34 billion barrels (onshore and offshore), mostly in the Delta area (Ekundayo, 2005). Since the commencement of crude oil exploration and drilling in this fragile environment more than four decades ago, the local communities have paid a dear price. Toxic effluents derived from drilling mud frequently dumped in rivers and
farmlands, for example, destroy marine lives and livelihoods (Okoko, 1999:375). Diverse villages in the region are criss-crossed by high-pressure pipelines carrying crude oil and gas. Spills and leaks from these pipelines are destructive to farmlands, biodiversity and aquatic lives. On a number of occasions, fire incidents in some pipeline sites, differently attributed to either sabotage or the appalling state of the pipelines themselves, have claimed hundreds of lives. The situation is practically worsened by the enormous quantities of greenhouse gases flared by different oil companies since the 1960s. However, with the recent completion and commissioning in 1999 of the Bonny liquefied natural gas project (LNG) some of the natural gas – still a small percentage of average daily production – is being processed into LNG for export. About 6,600 tons of LNG is currently produced daily and the volume promises to increase significantly in the near future (Okonta & Douglas, 2001:89; Mbendi, 2001). Nigeria is estimated to have natural gas reserves of 100 trillion standard cubic feet (about 2.8317 trillion standard cubic meters) in the Niger Delta area (VCL, 2002). The extraordinarily high temperature at which greenhouse gases are flared and pumped into the atmosphere (usually between13,000-14,000 degrees Celsius) coupled with the effects of acid rain produces insalubrious and miserable living conditions in many oil-bearing communities and for all categories of nature. The socio-demographic composition of Niger Delta is equally complex, comprising, at least, 26 ethnic and language groups that are distributed across nine oil-producing States – Abia, Akwa-Ibom, Bayelsa, Cross-River, Delta, Edo, Imo, Ondo and Rivers. With the exception of the Ibo-populated States of Abia and Imo, and the ethnic Yoruba State of Ondo, which altogether account for less than 6 per cent of the Delta oil reserves, the rest of the States are populated by varying sizes of minority ethnic groups. The above nine oil-producing States have a population of more than 21 million people (CBN, 2001:115). Two oil-producing States are dominant in the Niger Delta, Rivers and Delta States. The two states have an estimated population of 6.7 million and produce about 75 per cent of Nigeria’s petroleum – equal to 50 per cent of the national government revenue (World Bank, 1995). Despite its vast oil reserves, the Niger Delta region, not unlike the rest of the country, remains poor with more than 70 per cent of the inhabitants and indigenes living in rural communities. There are about 1,600 recognized, long settled, autonomous communities in the Niger Delta and the vast majority of them are typically rural (SPDC, 2002:9; Thomas, 2001). The rural populations predominantly live on fishing and peasant agriculture. Given the relatively high level of farmland and water pollution in the Niger Delta, rural-urban migration tends to be on the increase and in the context of the traditional role of the man as the prime breadwinner of the family, the phenomenon tends to more preponderantly affect the male heads of households in some of the communities (Okoko, 1999; Thomas, 2001:16). In a wider sense, life in the Niger Delta is generally desperate and poor. It is, however, doubtful whether the desperation and poverty levels are more severe than that found in other parts of the country although Human Rights Watch (HRW, 1995:95) argues that GNP per capita in the Delta area is below the national average
of US $260. Both urban and rural infrastructures – potable water, electricity, paved roads, medical facilities, and schools – are extremely scarce and poor. A considerable number of riverine communities in the area are inaccessible by road, and water transportation is conducted by means of dug-out canoes and motorized boats. The extensive flooding arising from torrential rainfall and overflowing rivers, which in some areas lasts for over half of the year, makes both road and water transportation quite treacherous. Water related diseases, including cholera, malaria, river blindness, typhoid fever and guinea worm exert an abysmal toll on the local populations. In many and different ways, the natural and social distresses that come with the oil industry undoubtedly aggravate the fragility of this complex and delicate ecosystem. 3.4 Crude Oil Discovery and Development of the Oil Industry Crude oil discovery and extraction activities in Nigeria date back to May 1956 when the then Shell-BP Petroleum Development Corporation of Nigeria Limited (a joint venture of Shell and British Petroleum (BP) but operated by Shell) made the first commercial discovery of oil at Oloibiri community of Niger Delta. The discovery was preceded by series of explorations for oil and gas that date back to 1903 by Shell D’Arcy,1 Mineral Survey Company and the German-owned Nigerian Bitumen Corporation. Oil production and export have been carried out since 1958 by Shell and other TNOCs. For the first decade of commercial extraction (1958-1968) the foreign oil companies basically controlled the entire equity, production, export and marketing of Nigerian oil and consequently paid royalties and taxes to the government. Largely basking in the euphoria of political independence, the Nigerian government was apparently contented with the considerably significant monetary gains it derived in the form of rents from the oil business, without having to make any tangible investments and commitments. During this predominantly immediate post-colonial phase, government regulation and supervision of the activities of TNOCs were quite negligible. Nigeria’s active participation in the oil economy began with the formation of federal government-owned Nigerian National Oil Corporation (NNOC) in May 1971, which was later reconfigured and renamed the Nigerian National Petroleum Company (NNPC) in April 1977. This preceded Nigeria’s membership of OPEC in July 1971 and was mainly a consequence of OPEC Resolution No. XVI.90, which called for member countries to acquire 51 per cent of foreign equity interests and to participate more actively in all aspects of oil operations, and of Nigerian Petroleum Decree No. 51 of 1969, which vested the entire ownership and control of all petroleum in Nigeria with the state and/or its agency (Khan, 1994:20). Before gaining full membership, Nigeria had attended OPEC summits since 1964 as an observer and also implemented some of the organization’s resolutions. In 1972 the federal government introduced the Indigenization of Foreign Enterprises Decree on the basis of which it was to force all the expatriate oil companies in 1973 to start operating joint ventures with the NNOC. Following the 1972 Indigenization policy of government – later expanded in 1977 to increase
government equity participation – the NNPC presently operates two types of partnerships with the TNOCs. These are called joint ventures and productionsharing contracts. In a ‘joint venture’, the operator (TNOCs) and the joint venture partner (NNPC and in rare cases with other foreign investors) share the operating costs, while in a ‘production-sharing contract’, the contractor (TNOCs) advances all funds towards running costs (Okeke & Sobotie, 2000). Thus theoretically, in a production-sharing contract, the government does not have to invest anything; while in a joint venture it must advance large funds at regular intervals. But in practice, the government sometimes has substantial arrears of equity subscription otherwise known as ‘cash call’ (usually running into millions of dollars) owed to the expatriate oil companies in the joint venture business. By 1979, NNPC had acquired about 57 per cent participation interest in most of the oil-producing ventures, with an 80 per cent interest in the former Shell-BP venture (with Shell retaining 20 per cent), following the nationalization of BP in 1979 (Khan, 1994:23). Profits from the joint ventures are shared in the same equity ratios between the NNPC and its principal partners. Beyond equity participation on behalf of the government, the NNPC plays a more significant role in the ‘downstream sector’ (i.e. processing of crude oil into various petroleum products), as well as in the marketing of Nigeria’s crude oil. The company also carry out oil and gas exploration, mostly discovering fields for producing companies. During the past few years, the NNPC has also become involved in limited (negligible in gross national terms) oil production mainly through two of its diverse subsidiaries, the Nigerian Petroleum Development Corporation (NPDC) and National Petroleum Investment Management Services (NAPIMS). Shell has remained the largest oil company in Nigeria since colonial time by courtesy of its pioneer leverage. The Anglo-Dutch company currently accounts for roughly half of Nigeria’s oil production. The success of Shell in the Niger Delta coupled with the prospects of Nigeria’s decolonization attracted other foreign companies including Mobil, Texaco, Gulf (later Chevron), Agip, Esso and Safrap (now Elf) into the country to take up concessions that had been relinquished by Shell (basically onshore) and also to participate in the hitherto largely unexplored offshore areas. The first offshore finds were made in 1963 by Gulf (Okan-1), Mobil (Ata-1) and Texaco (Kulama-1) (NNPC, 2003:1). Since then, the Nigerian oil industry has witnessed rapid expansion and growth, notwithstanding the disruptive effects of the Biafran civil war (1967-1970) in which the oil-rich Eastern region attempted to secede from the federation and the recent wave of community disturbances in the Niger Delta area. Whilst Shell continues to dominate onshore production, two US companies, ExxonMobil and ChevronTexaco, overwhelmingly dominate offshore production. Overall, Nigeria’s oil production industry is dominated by the big multinationals. Until 1992 the expatriate companies had a hundred per cent domination of the oil exploration and production businesses. Following growing domestic pressures, recent licensing policies of government have tried to encourage the emergence of indigenous explorers and producers in the industry. But hitherto, indigenous explorers and producers (NNPC subsidiaries inclusive) still account for less than 2 per cent of Nigeria’s crude oil output, rising from zero
level in 1992 to about 130,000 b/d in 2002 (Vanguard, 2002a). Nigeria currently produces and exports over 2.3 million b/d, mostly the high quality (having negligible sulphur content) bonny light or sweet crude oil (Ekundayo, 2005). Since the oil boom era of the early 1970s, the US has remained the largest single buyer of Nigeria’s oil. Nigeria also has a highly substantial export market in Western Europe, mainly Germany, France and Italy. The country has relatively insignificant export markets elsewhere in Latin America, Africa and Japan. The growth of Nigeria’s oil exports as a percentage share of the country’s external revenue earning has been quite remarkable. From accounting for only 10.75 per cent of total export earning in 1963 and 32.39 per cent in 1966, crude oil rose to account for 73.70 per cent of export earnings in 1971, 92.60 per cent in 1974, 97.53 per cent in 1982, 97.94 per cent in 1992, 98.22 per cent in 1996 and 95.25 per cent in 2000 (cf. CBN, 2001:89; Onayemi, 2002). Correspondingly, oil revenue as a percentage of total national revenue (budgetary revenue) has also grown from a less than 25 per cent average in the 1960s to an average of more than 70 per cent from the 1970s through the 1990s (Ukwu, 2000:68). Ever since becoming an oil dependent economy in the 1970s, the politics of who should controls the oil wealth (such as local oil-bearing communities, municipal authority, State government or federal government) and who gets what share of it has taken centre stage in Nigeria, further aggravating the incidence of national instability. 3.5 The Development of Oil-related Legislation and Policies: An Historical Perspective 3.5.1 The Colonial Phase The development of Nigeria’s oil industry and oil-related legislations and policies, which dates back to British colonial order, was facilitated by a number of colonial legislations. Given the supremacy of the colonial state, colonial legislations superseded and in practice invalidated in the event of conflict of interests the mosaic of local unwritten customary laws and conventions that hitherto governed different autochthonous pre-colonial communities, chiefdom, principalities, and empires. After the amalgamation of the Northern and Southern Protectorates of Nigeria in 1914, the British colonial authorities enacted the Minerals Oil Ordinance No. 17 of 1914 (amended in 1925, 1950 and 1958), which principally gave oil exploration monopoly in Nigeria to British firms (Omoruyi, 2000). In pursuance of the above legislation, the British colonial government in 1938, nearly two decades before oil was discovered in Nigeria, granted Shell D’Arcy oil exploration licence covering the entire territory of Nigeria. This exclusive oil exploration authority was granted to protect the economic interests of Shell and the British Empire against other foreign competitors, notably American oil multinationals that were obviously interested in the Nigerian market. Consequently, the colonial government backed Shell with the necessary security provisions they needed to carry out oil exploration in the Nigerian territory.
